Choice Hotels Announces Special Cash Dividend
Choice Hotels International, Inc. (NYSE: CHH) (the “Company”) announced today that the Company’s Board of Directors has declared a special cash dividend in the amount of $10.41 per share, resulting in an aggregate payment amount of approximately $600 million. The record date for the special cash dividend is August 20, 2012 and the special cash dividend will be paid on August 23, 2012. The Company has been informed by the New York Stock Exchange that, in accordance with its rules, the ex-dividend date is expected to be August 24, 2012. Accordingly, stockholders who sell their shares on or before the payment date will not be entitled to receive the special cash dividend. The special cash dividend is being paid with the proceeds from the Company’s recent offering of 5.750% senior notes and from its new senior secured credit facility.
“The special dividend announced today reflects management’s and our board’s confidence in the future of our brands and their substantial cash generating capabilities,” said Stephen P. Joyce, president and chief executive officer. “In this unprecedented and prolonged period of historically low interest rates, this capital structure transaction and significant return to our shareholders is both the appropriate corporate finance decision and the right strategic action for Choice. One of our long stated goals is to deliver increasing value to our shareholders in the most efficient and effective way possible. This transaction achieves this objective in a meaningful way, lowering our overall cost of capital without affecting our ability to grow the Company. After this transaction, we will continue to have significant financial resources to fund our business operations and exploit potential and actionable business development and growth opportunities in the near term.”